Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I thank Deputy Martin Kenny for his good wishes. I would be a little bit more optimistic than a couple of months but nobody knows.

Teagasc released the preliminary results of the National Farm Survey 2016 recently which showed average farm income of €24,000, a 9% decrease over 2015. However, there are significant differences in farm income depending on the farming system and size of farm. The preliminary results also showed that 19% of farms produced a farm income of less than €5,000 while 14% of farms produced an income of more than €50,000.

However, it should also be borne in mind that 64% of the farms represented by the national survey are classified as part time with a family farm income of €11,355, based on labour input required. The remaining 36% are classified as full time, with an average family farm income of €46,500.  In addition, on almost half of all farms, either the holder and-or spouse has off-farm employment.

I am aware that 2016 was a challenging year for some sectors. As a small open economy which exports the vast bulk of its main agricultural commodities, Ireland will always feel the effects of volatility on world markets. However, there are measures in place to help Irish farmers through these periods, including the following. In 2016, direct payments per farm as estimated by Teagasc increased by 4% to almost €18,000 and accounted for 75% of income on average. These provide a fundamental hedge against volatility. The agriculture cashflow support loan scheme was developed by my Department in co-operation with the Strategic Banking Corporation of Ireland, SBCI, making €150 million available at interest rates of 2.95%. The loan scheme distributed and administered through AIB, Bank of Ireland and Ulster Bank, provides farmers with a low-cost, flexible source of working capital and allows farmers to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

The scheme was launched in January and by the beginning of March, all of the participating banks had reported that their funds were committed. The SBCI reported that €60.2 million has been drawn down by farmers to the end of April. The average loan size is €32,000, with more than half the loans being advanced for terms of four years or more. I am pleased at the very positive reaction by farmers to the scheme, which has proved that significant demand exists for this sort of low-cost flexible finance. The Minister met the chief executives of the participating banks to discuss this and other access to finance and he asked the banks to respond positively to the demand that has been demonstrated by reducing interest rates and providing more flexible terms for cash flow loans in the future.

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My Department will continue to engage with the Department of Finance on key agri-taxation policy objectives, including responses to income and price volatility. Risk management is one of the topics covered by knowledge transfer groups. Animal disease risks are covered by the targeted animal health and welfare advisory measure. Fixed price contracts are increasingly becoming a feature of the producer-processor relationship in the dairy sector, with numerous milk purchasers offering such contracts, which provide producers with the opportunity to lock-in prices over the medium term, taking costs of production into account. Such relationships are a welcome development in terms of their potential to mitigate volatility.

I believe that an important insulation against volatility is moving up the value chain where possible, in terms of the type of products sold and how they are produced. Food Wise 2025 contains detailed recommendations aimed at improving value added and productivity at all stages of the food supply chain. It is clear that driving the implementation of the Food Wise recommendations, particularly those related to market development, competitiveness and innovation, will assume even greater importance in the light of Brexit.

The UK's decision to leave the EU reinforces the need to develop as many outlets for our agrifood exports as possible in order to minimise our dependence on any one market. Indeed, this principle of market development is already a key component of Food Wise. We have been very active in recent years in efforts to diversify markets, and in aiming to respond to consumer demands in emerging markets.

The challenges linked to Brexit are immense, given the very close trading relationships between Ireland and the United Kingdom and on the island of Ireland. We are determined to work closely with the industry and with other governments to identify strategies and approaches that will maintain the success of the Irish agrifood and drinks sector, at both farm and processing levels.

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